Nogger's Blog

W/e 10/03/17 -- EU grains closed mostly lower on the day, but mixed for the week.

The day ended with Mar 17 London wheat up GBP1.05/tonne at GBP146.65/tonne, Mar 17 Paris wheat was down EUR4.25/tonne at EUR167.75/tonne, Jun 17 Paris corn was EUR1.50/tonne lower at EUR172.50/tonne and May 17 Paris rapeseed fell EUR2.75/tonne to EUR402.25/tonne.

For the week that places nearby London wheat GBP1.10/tonne higher, with Paris wheat down EUR6.25/tonne, corn EUR4.25/tonne firmer and rapeseed down EUR6.50/tonne.

A weaker sterling this week has supported London wheat, in addition to tightness in old crop supply.

"The vast majority of GB arable crops have come into the spring in good condition, according to the latest ADAS crop report. The relatively dry and mild conditions during the autumn and winter allowed pesticide applications to be made as planned and there are few weed, pest or disease issues to report at this stage in the season," said the HGCA.

They did however report a drop in overall winter plantings, including an English and Welsh wheat area decline of 5% to 1.612 million ha, along with a 2% fall in barley sowings and a 1% decrease in the area given over to winter OSR (to 538k ha).

Many pundits say that the actual sown area is even lower, especially for OSR where Origin Enterprises this week came up with a figure of only 500,000 ha for the UK as a whole, "a reduction of approximately 10% on last year," they said.

"Farmers have been deterred from sowing the oilseed by heavy losses in many areas to cabbage stem flea beetle, following the introduction of EU curbs on neonicotinoid insecticides," reported Agrimoney.

In other news, Brussels reported 235 TMT of soft wheat exports this past week, taking the season to date total to 16.5 MMT, down 13% on 19.05 MMT this time last year.

Cumulative EU barley exports so far this season stand at 3.2 MMT, down 59% from a year ago, whilst cumulative EU corn imports of 7.4 MMT are down 24%.

On the international stage, we can report a 720,000 MT hard wheat tender from Saudi Arabia.

W/e 24/02/17 -- EU grains closed the week with Mar 17 London wheat down GBP3.20/tonne from last Friday at GBP143.50/tonne, Mar 17 Paris wheat was unchanged on the week at EUR171.50/tonne, Mar 17 Paris corn was also unchanged on the week at EUR171.25/tonne and May 17 Paris rapeseed ended the week EUR13.00/tonne lower at EUR410.25/tonne.

A firmer sterling outlook, and the knowledge that UK feed wheat prices are already among the most expensive in the world, leans bearish for London wheat.

Paris wheat meanwhile remains in a sideways to modestly upwards trend helped by euro weakness which is fostering ideas that exports from other nations than France (such as Germany) will be more buoyant in the second half of the season than the market had been expecting.

EU soft wheat exports have certainly looked like they are slowing up this past couple of weeks though. Cumulative exports to date stand at 15.76 MMT, up by only around 81 TMT on a week ago, a net downturn of 11% from 17.642 MT at the same point in 2015/16. EU total all wheat exports for the full season are estimated by the USDA to decline 26.5%, so a second half downturn is certainly to be expected.

Trade attention is also starting to focus on 2017/18. According to the February issue of the JRC MARS crop monitoring bulletin for Europe, this winter is finishing with no major constraints to winter crops.

"Rain would be welcomed in large parts of southern Germany, southern Sweden, the Czech Republic and the Baltic countries, to restore soil water reserves and groundwater as spring approaches," they say.

"These regions have recorded a persistent rain deficit, with less than 10 mm of precipitation during the analysis period. Nevertheless, these dry conditions generally do not present an immediate concern for crops," they note.

"Frost-kill damage remains limited despite a persistent cold spell throughout January in central and eastern Europe, which has led to minimum temperatures of around -15°C, and reaching values below -20°C in many areas," they add.

Ukraine exported 28.65 MMT of grains in 2016/17 to February 22, report UkrAgroConsult. This volume included 13.33 MMT of wheat, 10.53 MMT of corn and 4.64 MMT of barley.

Egypt's GASC said that they'd signed an agreement to import 360,000 MT of Russian and Ukrainian wheat for Mar 21 - Apr 1 shipment. The cheapest Russian price reported was $196.50/tonne FOB versus $195.90 FOB for the Ukraine origin material.

The IGC were unchanged on their global 2016/17 wheat production forecast from a month ago at 752 MMT. They did however up corn output again, this time by 4 MMT to 1049 MMT.

"Conditions for 2017/18 winter crops in the northern hemisphere remained mostly favourable. Only a small fall in all-wheat harvested area is anticipated, but with a projected drop in average yields, the next world harvest is seen retreating by 2% y/y (year-on-year)," they added.

W/E 17/02/17 -- EU grains closed with Mar 17 London wheat down GBP1.10/tonne on the week at GBP146.70/tonne, Mar 17 Paris wheat was down EUR0.25/tonne versus last Friday at EUR171.50/tonne, Mar 17 Paris corn fell EUR1.75/tonne over the course of the week and Feb 17 Paris rapeseed was up EUR1.50/tonne.

The latest data from Brussels shows that the EU exported around 240,000 MT of soft wheat for the week ending February 15, pushing total exports for the 2016/17 marketing year to 15.54 MMT.

That's around 8% lower than the 16.84 MMT shipped out a year previously and a 14% down on 18.10 MMT the season prior to that.

At home, "there has been less than a £10/MT premium for full specification bread wheat over feed wheat since October. However, UK bread milling wheat prices are historically firmer, with average UK ex-farm prices two weeks ago hitting their highest level in 22 months," said the HGCA.

"The UK now has some of the most expensive feed wheat in the world. As part of the tighter UK wheat supply and demand picture that we already knew about this season, there has been continued strong demand for feed wheat for both bioethanol and animal feed," they added.

The latest customs data shows wheat imports into the UK reached a 15-month high in December of 174 TMT. Exports fell to 93 TMT the lowest monthly total since July 2015.

On a global level, Chicago wheat futures closed at their highest levels since last June on Wednesday following the USDA's move to cut its forecasts of US and global end-season stocks for wheat the previous week.

W/e 10/02/17 -- Soycomplex: Beans closed higher on the day and for the week. The market was buoyed Friday by the announcement of 140 TMT worth of US soybeans sold to unknown for 2016/17 shipment. In their latest WASDE report the USDA were unchanged on their outlook for Brazilian soybean production this year (104 MMT), but lowered Argentina by 1.5 MMT to 55.5 MMT. They also reported US soybean export commitments so far this season at 51 MMT, a 21% increase year-on-year. This is also only 4.8 MMT away from it's current forecast for full season exports of 55.8 MMT. In other news China reported that they'd imported 7.66 MMT of soybeans in January, 35% more than last year. In Brazil, IMEA reported the soybean harvest 45.8% complete in Mato Grosso, versus only 25.6% done at this time last year. Mar 17 Soybeans settled at $10.59, up 8 1/2 cents; May 17 Soybeans settled at $10.70, up 8 1/2 cents; Mar 17 Soybean Meal settled at $342.10, up $3.70; Mar 17 Soybean Oil settled at 34.61, down 06 points. Mar 17 beans were up 32 cents compared with last Friday.

Corn: The market closed higher on the day and versus last Friday. In Chicago the Mar 17 contract closed at the best levels on a front month since late June 2016. The USDA this week raised their estimate for the size of the global 2016/17 crop by more than 2 MMT to 1040 MMT. However they also upped consumption by 6 MMT and cut carryout by 2.5 MMT. Chinese corn usage was projected 4 MMT larger, mostly from increased feed usage. The USDA also reduced the size of this season's EU-28 corn crop, marking that down to 60.3 MMT, with ending stocks cut to 4.75 MMT, the lowest level since 2007. Record corn production for 2016/17 reflected larger crops in both Ukraine and Mexico more than offsetting lower production in the EU, they said. "Robust demand in both Iran and Vietnam support a higher volume of global exports. Moreover, a smaller barley crop in Iran boosts the demand for (other) imported feedstuffs," they added. Mar 17 Corn settled at $3.74 1/2, up 5 cents; May 17 Corn settled at $3.82, up 4 3/4 cents. For the week that puts Mar 17 corn up 9 1/4 cents.

Wheat: The wheat market closed higher, with Mar 17 CBOT Wheat settling at $4.49, up 5 1/2 cents; Mar 17 KCBT Wheat ending at $4.60 1/2, up 9 1/4 cents and Mar 17 MGEX Wheat finishing the day at $5.72 1/2, up 4 cents. For the week that puts nearby Chicago wheat up 18 3/4 cents, with the Kansas market 20 cents higher and Minneapolis up 14/14 cents. For Chicago wheat this was a more than 7-month closing high for a nearby contract. In their February WASDE report the USDA said that "prices for most wheat classes were up during the month of January, underpinned by 2017/18 US crop prospects as well as a weakening dollar." They also noted that "the growing gap between HRS and most other wheat classes is indicative of tight supplies of high-protein wheat in the global market." US 2016/17 wheat exports were raised 1.5 MMT to 27.5 MMT, whilst Russia's were lowered 0.5 MMT to 28.5 MMT. World ending stocks were lowered from 253.3 MMT to 248.6 MMT.

W/e 10/02/17 -- EU grains closed mostly higher on the day and for the week.

The day ended with Jan 17 London wheat up GBP0.40/tonne at GBP147.80/tonne, Mar 17 Paris wheat was unchanged at EUR171.75/tonne, Mar 17 Paris corn was up EUR0/.25/tonne at EUR173.00/tonne and May 17 Paris rapeseed rose EUR3.25/tonne to EUR421.75/tonne.

For the week that places nearby London wheat GBP0.45/tonne higher, with Paris wheat up EUR2.50/tonne, corn EUR1.50/tonne firmer and rapeseed up EUR9.00/tonne.

The USDA this week cut their estimate for the size of the 2016/17 global wheat crop by more than 4 MMT to 748.2 MMT and raised consumption by 0.5 MMT to 740.4 MMT. World ending stocks were lowered from 253.3 MMT to 248.6 MMT.

That helped Chicago wheat futures climb to more than 7 month highs, supporting the European market.

The USDA also reduced the size of this season's EU-28 corn crop, marking that down to 60.3 MMT, with ending stocks cut to 4.75 MMT, the lowest level since 2007.

Brussels reported 215 TMT worth of EU soft wheat exports this week, taking the cumulative total so far this season to 15.1 MMT, a 7% decline year-on-year

IKAR said that they expect 2017/18 Russian wheat production at 67.5 MMT, down from their estimate of 73.3 MMT for this season, but see exports holding steady at around 28 MMT.

UK prices remain expensive compared to the rest of the world, reflecting relatively tight availability in the face of strong demand from the biothethanol sector.

"Wheat used by the GB milling industry (including starch and bioethanol) over the first half of the season (Jul-Dec), totalled 3.65 MMT, according to latest data published by Defra...this is 10% higher than the same period last season and the highest amount of wheat milled at this point on records going back to 1997," noted the HGCA.

W/e 03/02/17 -- Soycomplex: Beans closed with Mar 17 Soybeans at $10.27, down 10 1/4 cents; May 17 Soybeans settled at $10.37 1/4, down 10 cents; Mar 17 Soybean Meal settled at $331.60, down $2.20; Mar 17 Soybean Oil settled at 33.86, down 73 points. For the week that puts Mar 17 beans down 31 3/4 cents, with Mar 17 meal down $11.40 and Mar 17 oil down 41 points. The harvest is moving on, and the crop seemingly getting larger in Brazil. Soybean harvest in the lead producing state of Mato Grosso is at 31% complete according to IMEA. FC Stone increased their soybean production estimate for Brazil to 104.1 MMT from 102.8 MMT. Informa Economics increased their forecast for 2016/17 Brazilian soyabean production by 1.5 MMT to 106.5 MMT.

Corn: Corn ended with Mar 17 Corn at $3.65 1/4, down 2 1/4 cents, and May 17 Corn settling at $3.72 3/4, down 2 1/4 cents. For the week that puts Mar 17 up 2 3/4 cents and May 17 up 3 cents. Mato Grosso’s second corn crop planting is currently at 27% completed vs. 11% last year. Argentina’s Buenos Aires Grain Exchange estimated their crop to be 99.3% planted, while production is estimated by Informa to be 35.2 MMT, down from the 36.0 MMT forecast previously. The EU Commission pegged EU corn ending stocks for 2016/17 at the lowest in 9 years. "At 9.9 MMT, the latest estimate is below the levels recorded in 2012/13 and is the result of two consecutive years with below average output, against robust demand," said the HGCA.

Wheat: Mar 17 CBOT Wheat settled at $4.30 1/4, down 4 1/4 cents; Mar 17 KCBT Wheat settled at $4.40 1/2, down 3 cents; Mar 17 MGEX Wheat settled at $5.58 1/4, down 2 3/4 cents. For the week that puts Chicago wheat 9 3/4 cents higher, with Kansas up 6 1/4 cents and Minneapolis down 1 3/4 cents. Managed money in Chicago continues to hold a significant short position, seemingly limiting downside. Positive factors for wheat include reduced winter wheat acres, dry extended forecast for the Plains, and the reduction of spring wheat acres by as much as 1.5 million acres (according to the University of North Dakota), said Water Street Solutions.

W/e 03/02/17 -- EU grains closed the week with Mar 17 London wheat down GBP1.00/tonne from last Friday at GBP147.35/tonne, Mar 17 Paris wheat was down EUR0.25/tonne to EUR169.25/tonne, Mar 17 Paris corn was down EUR0.75/tonne at EUR170.50/tonne and May 17 Paris rapeseed ended the week EUR5.25/tonne lower at EUR412.75/tonne.

"UK old crop wheat market recorded marginal declines last week mainly driven by further currency volatility, while the domestic new crop market showed small increases on the week," said the HGCA.

"From a global perspective, US grain markets closed up on the week, driven by a combination of factors including strong bioethanol demand for maize," they added.

EU corn stocks for the end of the season, at 9.9 MMT, were pegged at the lowest in over nine years by the EU Commission, they noted. This is viewed as supportive for EU wheat prices.

Saudi Arabia bought 1.5 MMT of feed barley in a tender for shipment between March and May.

Strategie Grains cut their monthly estimate for 2017/18 EU rapeseed production by just over 0.5 MMT to 21.56 MMT due to severe cold weather, specifically citing damage to the crop in Eastern Europe.

Statistics Canada placed total wheat stocks there as at 31 December 2016 at 25.03 MMT, over 800 MT above the average trade expectation.

About Me

Worked in agriculture for over 30 years as a shipper, merchant, trader & broker, but still hasn't got the faintest idea what he's talking about.
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He can also provide content for your website like market reports and commodity prices. And if you haven't got a website he can design one for you. In short, the man's a bloody genius.

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The guy is clearly deranged and you should almost certainly ignore everything that he says.